1. Field of the Disclosure
Embodiments of the disclosure relate in general to the field of computers and similar technologies, and in particular to software utilized in this field. Still more particularly, it provides a system, method, and computer-usable medium for determining a maximum amount to finance based on a plurality of periodic payments.
2. Background of the Disclosure
Purchasing a vehicle can be a tedious, time consuming, and at times perplexing and frustrating experience for most consumers. Is this the car I really want? Am I getting the best possible price? Is it going to hold its value? Can I afford the payments? How much can I really afford? What if I am unable to get the financing I want? All of these, and more, are common questions that run through the mind of someone considering the purchase of a vehicle, regardless of whether it is new or used.
One approach to these issues is to go through a buyer's service or broker. You decide what kind of vehicle you are interested in and how much you are willing to spend. In turn, searching for the vehicle, negotiating its purchase price, and arranging its financing are all taken care of. Another approach gaining recent popularity is to research and shop for a vehicle online. Some Web sites even provide loan calculators to help consumers calculate the monthly payment for a vehicle. Once you find the vehicle you want, you make an offer, either through the dealer's Web site or by telephone. It is even becoming more common to arrange financing online.
However, many of these approaches are top-down. That is, the consumer selects the vehicle they want, obtains a price, and then the monthly payment is calculated. As a result, determining the maximum amount that can be financed to meet a target monthly payment often involves several trial and error attempts. Other approaches are known that are bottom-up. In these approaches, the consumer provides a maximum monthly loan amount they are willing to pay and a calculation is performed to provide an amount to borrow. However, an often overlooked aspect of purchasing a vehicle is the cost of insurance. Many states have minimum insurance coverage requirements. Likewise, it is not unusual for a financial institution to require additional insurance coverage for the financed value of the vehicle. Furthermore, it is often difficult for a consumer to predict insurance costs for a vehicle until after they have committed to purchasing the vehicle. Moreover, it is not uncommon for a consumer to be unpleasantly surprised when the combined loan payment and insurance premium cost is in excess of their original monthly budget for a vehicle. As a result, the consumer may be tempted to reduce their insurance coverage to lower their monthly costs. However, doing so often places them at more risk if they are involved in an accident.